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torero

Week 11

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Finally a setup appeared after waiting so long from vacation! Taking a short here at the break of the bear flag. Looking for 9140 as possible target. 8933 is measured target for this bear flag.

 

FOREXPLANE-GBPUSD-240-MIN-BEAR-FLAG-BREAKDOWN-SHORT.gif

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I didn;t realize we were already at 50% retrace on daily. Wow, getting rusty from vacation. Being on vacation sure takes the routine out of doing the right thing.

 

FOREXPLANE-GBPUSD-DAILY-50-RETRACE.gif

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Yeah, doesn't take long to slip out of the groove huh?

 

These major European pairs are good buy candidates on pullbacks. Nothing has changed out there to offer the Dollar a leg up really.

 

I guess if you're jobbing then maybe it's a slightly different perspective, but you gotta be fleet of foot taking that option in current circumstances.

 

On a side not, I see this place now has a FX chat facility. Looked in on it earlier, but no-one home. I guess most folks on here are heavy indx ftrs players judging by the content, does that FX room ever attract personnel?

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It just opened up so no one knows about it yet. I haven't gone there myself until there is someone else I can chat with (I can chat with myself in the comfortable of my chair without the chat room thank you LOL).

 

Yes, the action has been very messy lately, no direction. I saw a bear flag but it turns out there are lots of resistance sitting just below the flag. I take it was a consolidation/reversal working. I'll be looking for buys now.

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It just opened up so no one knows about it yet. I haven't gone there myself until there is someone else I can chat with (I can chat with myself in the comfortable of my chair without the chat room thank you LOL).

 

Gotcha. Yeah if it's new I guess it'll take a while for folks to cotton on.

 

Agree, not much outside range activity on the European's. The cute cookies are merely soaking up the supply under these topside stop builds. If those blow, we'll get a decent run no doubt.

 

Yen's been the place to be of late. Plenty goin on across there.

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Yes, been watching GBPJPY and it's trending quite nicely. Unfortunately, I'm a one-woman, oops, one-currency man (LOL) so I can watch but can't touch it HA HA.

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:) I hear ya.

 

I'm not so loyal. If it lifts it's skirts, I'll pay it some attention!!

 

Hey, looks like we christened the FX room just now. Anna-Maria sprayed the walls with dubious grafitti. I best report that dishonorable behaviour to the site boss man!

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I missed it the chat room, it's empty now. I just came back from running some errands. I see tex is still lurking about although she's been silent for past week or so. Serious business to attend to.

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Ha ha ha, yeah she's under pressure! :eek:

 

Buk's back home Stateside till mid 2nd Quarter, so she's on double shifts LOL.

 

Nah, as is evident, there's been plenty volatility of late on the Yen stuff, so lots to keep on top of. No doubt she'll slope back in when it all exhales.

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Wish her lots of luck from me if she ever take a break or move her eyes from the screen.

 

I should move over to GBPJPY until GBPUSD gets out of this consolidation. Let's see what I can pick up tomorrow at London open.

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There was your trigger on that 4 hour bar at the dble bottom, no?

 

They've been accumulating (adding to) this along with the Euro all month. Dollar's in a hole against these 2 European majors, not a Bull in sight at present.

 

This is the run for the week now. Dollar longs are well out of sight on this step up.

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I prefer to wait for the pullback back to the peak if possible to confirm the breakout is real. It's possible it might be over for other pairs but never know... I have to follow what I see, the entry and the target. Possible the pullback might not happen until early next week. We'll see.

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Fair play.

 

Buddy of yours JimmyMac (McErney) from "the other place" say's Hi ;)

 

He thought you'd gotten yourself kidnapped or somethin?!

 

I guess he's been lonesome over there LOL :D

 

 

That'll teach him to hang out in darkened dingey back alley flop houses!

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I prefer to wait for the pullback back to the peak if possible to confirm the breakout is real.
An interesting dilemma, not just in FX either.

 

I am a very cautious trader and I also used to wait for a re-test and confirmation of new S or R before taking the trade. These days, although I still class myself as ultra-cautious, there is an added factor I take on-board. And that it momentum.

 

Momentum is a tough one on FX where you don't get Volume to play with and though I have played with using tick pressure as a proxy for Volume, it does not in my view come close to 'real' Volume. And that's discounting the argument over just how reliable any data vendor's tick data is going to be on FX anyhow.

 

So, in my increasingly tough battle to get things simpler rather than more complex I decided to use (for FX only) an additional criteria for these potential re-test areas. You'll need to test this in your own timeframe to see if it makes sense for you, but I work from a daily down through an hourly, 15 min and then finally 5 min execution level chart.

 

If the bar through the potential re-test level is 'strong' i.e. has a H-L range at least three times the 5 period MA of H-L then I don't wait for a re-test. Sure, it still catches me out, but less than it doesn't. Stop is always for me 5 pips away from the S/R level I'm trading. Very, very tight.

 

If the bar through the potential re-test level is 'weak'i.e. has a H-L range no greater then the 5 period MA of H-L then I do wait for a re-test. Again, stop at 5 pips away from the S/R level I'm trading. Again, this isn't always going to break for me, but it does more than it doesn't.

 

By factoring in this additional interpretation (and that's all it is) of momentum, I get into far more FX trades than I would by simply waiting for a re-test regardless of current market action.

 

Where I refer to S & R levels of course you can imply I am talking about any basic charting break (triangles, rectangles, triples, doubles - whatever).

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Fair play.

 

Buddy of yours JimmyMac (McErney) from "the other place" say's Hi ;)

 

He thought you'd gotten yourself kidnapped or somethin?!

 

I guess he's been lonesome over there LOL :D

 

 

That'll teach him to hang out in darkened dingey back alley flop houses!

 

Ah, tell him I say hi and that I'll be joining the dingy flop houses again soon LOL!

 

Been getting rusty and trying to get back in slowly.

 

Hi Bramble, FX is tricky when it comes to breakouts. S/R are reliable but those announcement bursts can ignore these levels so easily that sometimes we have to be careful. Never know where this thrust will stop and start. I always want to make sure there is a higher high forming before taking that long to have smart money behind me instead of in front of me. I'll review your method diligently to see how it works. Thanks.

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Hi Bramble, FX is tricky when it comes to breakouts. S/R are reliable but those announcement bursts can ignore these levels so easily that sometimes we have to be careful. Never know where this thrust will stop and start. I always want to make sure there is a higher high forming before taking that long to have smart money behind me instead of in front of me. I'll review your method diligently to see how it works. Thanks.

 

This is wise advice. I can give you an excellent example of this in the following chart. I pieced it together from another analysis I completed recently, but it's of relevance to the current discussion, so I thought I'd publicize this part of it. I apologize for some of the text being truncated. I shrunk the image and inserted the current chart in it so that it would all fit here for easy viewing. The truncated text basically said that after the pull-back, a larger thrust up is observed.

 

These two patterns are, as far as I'm concerned, very close to identical. They're quite common, particularly on the faster time frames (although less reliable on the faster frames too). This chart is based on the 4-hour time-frame, so it's quite reliable. The basic features are illustrated. What we saw on Friday fits this pattern almost precisely, and would suggest the next move will be higher.

 

68445fbcef04d26e.gif

 

Hi Bramble. You will notice that, just as Torero suggested might occur, there was a pull-back after this breakout - precisely as this pattern suggested there would be. The depth of the pull-back might not have been as large had this breakout not occurred at the end of a week. I suspect profit taking and pre-weekend position scuttles were probably to blame more than the CPI news that came out earlier. However, the important point here is that price did in fact retrace all the way back and touch support. If you take a quick look at the hourly charts at the end of the day, you will see that a pinochio (pin-bar) pattern formed, possibly opening the door on Sunday for a move back up the ladder to resume this leg higher.

 

I can also see your point. Sometimes, these breakouts don't return back to prior support levels and it pays to catch the ride as soon as you can. In these cases, if you play the pull-back game, you'd just have to wait for the next train. But then, as we all know, there are a never-ending stream of trains to ride.

 

Whatever works best for you is the best to use.

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Great charts, cowpip, and nice to see you back. It´s one thing I´ve learned over and over from past mistakes is I used to get in early (yes, your average eager beaver), end up paying for the risk higher, thus lowering my R-R ratio. So, better to see the pullback form instead of guessing where my stop order should be. I´ll be watching closely on Sunday night for this setup to work.

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